HARI SREENIVASAN: Wall Street rallied for a second day on hopes for a solution to the Greek debt problem. The Dow Jones industrial average gained 145 points to close at 12,188. The Nasdaq rose 41 points to close at 2,729.

A major hotel in Afghanistan was bombed late today, and a gun battle between police and the attackers continued for hours. Officials in Kabul said four suicide bombers blew themselves up inside the InterContinental Hotel often used by Afghan leaders and Western visitors. It happened on the eve of a conference on the transition process for the country. The Taliban claimed responsibility, saying its fighters had killed or wounded 50 foreigners and Afghans in the assault.

In Washington, the man chosen to become the top U.S. commander in Afghanistan lent his support to the U.S. troop withdrawal plan. Marine Lt. Gen. John Allen testified today at his Senate confirmation hearing. He said he backs President Obama’s decision to pull out 33,000 U.S. troops over the next 15 months, while acknowledging it was more aggressive than he expected.

LT. GEN. JOHN ALLEN, International Security Assistance Forces commander-designate: Although I wasn’t a participant in those discussions; I support the president’s decision and believe that we can accomplish our objectives. If confirmed, I will offer my candid assessment to the chain of command on the current state of the conflict, as well as provide options with respect to the president’s goals in accomplishing this strategy.

HARI SREENIVASAN: Allen also said the pullout plan means the Afghans need to urgently expand the numbers and abilities of their own security forces.

A resolution approving limited U.S. military action in Libya advanced today in the Senate. The Foreign Relations Committee endorsed the measure today. Democrat John Kerry and Republican John McCain called for authorizing U.S. involvement for one year, but barring any use of American ground forces.

Earlier, a top State Department lawyer defended the president’s argument that U.S. forces are not engaged in actual hostilities, so he doesn’t need congressional approval.

Republican presidential candidate Tim Pawlenty is warning his party not to shrink from world leadership. In a speech in New York today, Pawlenty strongly criticized President Obama’s handling of foreign policy as timid and murky. But he said he is concerned that some Republicans want to end the military missions in Afghanistan and Libya.

TIM PAWLENTY, (R) presidential candidate: History repeatedly warns us that, in the long run, weakness in foreign policy costs us and our children much more than we will ever save in a budget line item. America already has one political party devoted to decline, retrenchment and withdrawal. It doesn’t need a second one.

HARI SREENIVASAN: House Republicans fell short last week in a bid to cut off funding for the Libyan operation. And Jon Huntsman, another contender for the party’s presidential nod, has called for speeding up the U.S. withdrawal from Afghanistan.

White House officials and top Republicans pledged today to keep talking on how to cut the deficit. But there was no sign of any compromise. President Obama met Monday with Senate leaders from both parties on raising the national debt ceiling. Republicans insisted again today they will not accept tax hikes.

SEN. JOHN CORNYN, R-Texas: Obviously, if it’s possible to deal with the spending problem and the entitlement reforms, that’s our first choice. But, if the president and his party refuse to do the right thing, then, in the Senate, they’re going to be required to vote to raise the debt limit. And we will have a referendum in 2012 on that decision.

HARI SREENIVASAN: In turn, Democratic Majority Leader Harry Reid criticized several Republican presidential candidates for suggesting the issue is not so urgent.

SEN. HARRY REID, D-Nev. majority leader: I think everyone needs to do a better job of explaining to the American people what it means to raise the debt ceiling. What the American people seem to think — and I can understand why they would think that, but it’s wrong — that this means just more spending. All that raising the debt ceiling does is indicate we’re going to pay our bills that we have already accrued.

HARI SREENIVASAN: The Treasury Department has said the government will hit the debt ceiling and risk default by early August.

Fire crews in northern New Mexico struggled today against an aggressive wildfire near Los Alamos. The blaze has spread across 93 square miles in the mountains above the town, and more than 12,000 people have been evacuated.

But the director of the Los Alamos nuclear weapons laboratory said the facility remained secure.

CHARLES MCMILLAN, Los Alamos National Laboratory: We have analyzed all of our nuclear facilities. We have analyzed them for fire. We have analyzed them for wildland fire. We have mitigated those risks. All of them have mitigation. And I’m confident, given the team that we have, that we can protect those facilities.

HARI SREENIVASAN: The wildfire spawned a spot fire on the Los Alamos Lab property yesterday, but it was quickly contained.

Some 34,000 Japanese children will be given radiation meters in order to monitor the impacts of long-term exposure. The announcement today affects children between the ages of 4 and 15 in Fukushima. The city is 45 miles from a nuclear plant that was badly damaged in the March earthquake and tsunami. But there have been rising concerns about radiation levels. The monitoring program is scheduled to last for three months.

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